Business is Risk: Part OneMarch 22, 2013 | By: Nikki Hall
You might be cash strapped or emotionally bankrupt… either way, there is never a better time than now to put into motion a new strategy that can inject a new cash flow into your company and re-energize it in an economy that is struggling to support businesses. Realize that small business is risky and that is why every business owner needs to be willing to make the big decisions that will reorganize and inject a new cash flow into their companies.
In any type of business, it is hard to change fundamental day to day operations. However, if your company is floundering and you keep trying to save it by doing the same things every day, the demise of it is inevitable. I’ve heard more times than I can count that business is not for the faint hearted. And it isn’t. It’s for people that take risks. For instance, take a one man show infrastructure operating two to three servicing crews for residential irrigation systems. He can only sell to so many clients a day. He can only solve so many problems in an hour. His company revenue is stagnating and he’s positioned himself in a corner where he doesn’t have any more options. He needs to make a change.
At this point, the company owner in question needs to step back to look at what the economy as a whole has to offer. This is just one factor to take into account when considering options for change. Currently, lots of people are getting laid off; skilled talented people that are serious gamer changers for companies looking to get ahead. At this point, the one man show understands that he is in his current position for a reason. In this particular scenario, the owner lacks practical servicing experience. His main skills are in paperwork, proposals, and sales tactics. He knows he lacks organization both in the office and in the field. His strategy to combat his weakness is to hire an employee that is able to keep a detailed inventory of materials and run an efficient job site. He decides to take advantage of what the weak economy has provided in the form of educated and quality people looking to start over in companies. The one man show hires an employee that is willing to take a pay cut and in turn, this new employee gains the opportunity for long term upward job mobility and the promise of an accelerated pay raise based on his performance.
The point of this strategy for the business owner is to move his company from a position he cannot grow in to a situation that opens up other opportunities to him and his other employees. Once the company starts to recover and show a profit, the business owner might decide to enter the commercial market or diversify the services he already offers. Either way, his decision to restructure the company will open up new avenues for success for the company. The new employee will allow work to get completed in half the time and jobs can be billed at a more dependable rate. Since the new employee is also better at organizing, tracking, and reusing materials, the company is already cutting overhead costs. He is also helping the business owner to multi-task in areas he excels in. The company owner is able to spend more time with potential clients. His quality of salesmanship is improved. His ability to perform with concentration and confidence in his product and service is reinforced.
Overall, the company’s acclimation to these changes will not be quick. It can take six months, sometimes two to three years for the investment to show a positive return. Meanwhile, you are struggling to see the venture through. Just keep in mind that challenges and change is good. It can stretch a business owner and make him better. My father, a fellow business man, recently shared an old saying with me, “if you always do what you’ve always done, you’ll always get what you always got.”
To shift focus just a bit, the above is all about taking chances in business. At the risk of contradicting myself, there has to be an understanding that not every decision will have a good outcome; no matter how hard you try and work and wield… the venture may fail. So, on the outset of any gamble made in business, a person needs to weigh the pros and cons and determine what the acceptable risk is when considering which chances to take. This step will be discussed in part two of this article next week. See you then.Last modified: March 22, 2013
Nikki is the co-owner of Aspect Tree Service in Alexandria, VA. Learn about her business at www.aspecttreeservice.com
This story is part of our Small Business Corner, a peek into the life and trials of small business owners.